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Plus500 Fees Review: What’s the Verdict?

By Will Ellis
Last Updated on January 26, 2024

Broadly speaking, there has never really been a time in history where it’s as easy to get involved in the financial markets as it is currently, and as this seemingly only continues to evolve, online trading platforms are going to keep popping up everywhere.

Naturally, whatever features and user interface your trading platform has is massively important, but when you look across the board at all the various online brokers that are currently available, you tend to find that they’re a bit more homogenous than you’d maybe assume.

Essentially, this just means that there aren’t usually too many things that separate one platform from the next in terms of its capability β€” they all work fairly similarly, from providing you with educational resources/charts to allowing you to execute trades across a range of different assets.

However, one of the biggest differences when choosing which trading platform you’re going to use are the fees they come with β€” whether it’s an overnight funding amount or just most payment processing fees.

One of the more popular options among investors throughout Australia, in particular, is Plus500, so in this article, we’ll be exploring what Plus500’s fee structure looks like.

Still, given how many different options for investment platforms you have at your disposal these days, it’s worth providing a little bit of background information to get you more acquainted with how Plus500 works and what some of the benefits and drawbacks of this service are β€” especially if you’re considering using this as your primary means of investing.

Table of Contents:

What Is Plus500? πŸ”ŽοΈ


Plus500AU Pty Ltd (ACN 153301681), licensed by: ASIC in Australia, AFSL #417727, FMA in New Zealand, FSP #486026; Authorised Financial Services Provider in South Africa, FSP #47546. You do not own or have any rights to the underlying assets. Consider if you fall within our Target Market Distribution. Please refer to the Disclosure documents available on the website.

In a nutshell, Plus500 is a relatively run-of-the-mill online trading platform that operates around the world (including Australia) β€” not that it’s not an impressive service, just that it allows you to open buy and sell positions on *instrument* CFDs (including things like crypto assets, stocks, forex, commodities, and indices) as you’d expect to see with any of its contemporaries.

Plus500 logo

CFD Service. Your capital is at risk.

Having said that, Plus500 does still stand out in some regards, both in terms of the fairly favourable fees you can expect to see when using the platform and the general accessibility to global exchanges such as the London Stock Exchange (LSE) and the New York Stock Exchange (NYSE).

How Does Plus500 Work? πŸ‘€οΈ


At its core, Plus500 works mostly as a platform for trading what’s known as ‘Contracts for Difference‘ (more commonly referred to as CFDs), and these are basically just another type of financial asset that you can trade, except you never actually own them.

This might sound slightly convoluted, but it’s essentially just a kind of contract between you β€” the trader β€” and the platform (in this case, Plus500) that mirrors the price movements of the underlying asset instead, making it more about speculating financial derivatives rather than regular investing where you’d perhaps physically own a commodity, for instance.

As an investor, you might be slightly more used to the concept of traditional stock trading, where you’d just purchase and own the actual shares of a company, but CFDs work on the principle of price differentials instead.

This basically just means that open positions based on whether or not you think the asset you are trading’s price is going to rise or fall, and the amount of money you’ve either made or lost then gets calculated by whatever the difference is in the asset’s price at the time you opened and closed the position β€” relatively simple stuff.

Generally speaking, the specific type of trading strategy you can adopt when investing in things like CFDs and Futures contracts, while certainly risky, is actually a pretty unique way of approaching trading, so it’s definitely something you might want to consider getting involved in once you’ve learned about risk management.

Capitalising on Market Dynamics

Just to explore this concept of CFD trading a little bit further, the main appeal of it, and by extension, Plus500’s approach, is generally how versatile it is β€” not only are you able to make money (or capital losses) on upward movements of an asset like you might be used to (known as going long), but you’re even able to do so on the downward movements (known as going short), too.

This is actually fairly significant because it means that even if there’s a bear market or traditional investments look like they could decline, there aren’t any fewer opportunities to make money since you can still correctly predict the market’s direction β€” just make sure you handle any of the non-leveraged assets that you actually own in your spot portfolio or wallet accordingly, as obviously, that’ll still decrease in value during any bearish activity.

Though it’s not exactly realistic, in theory, this means that you could open a position, go long and ride the price action all the way up to your take profit targets, and then close your position before immediately flipping and shorting the same asset once you anticipate some kind of resistance.

Again, this isn’t something you should aim to do with every trade, but it’s certainly a testament to how many kinds of trading approaches you can adopt when investing in CFDs or Futures contracts.

Obviously, it depends on which particular market you’re investing in, but for markets like cryptocurrency, for instance, where volatility generally seems to be the norm rather than the exception, it can massively help if your platform gives you the flexibility to be pragmatic rather than just watching your assets decrease in value.

Aside from this, one thing we can definitely commend Plus500 on is how much effort they put into trying to educate their users, as you only need to go to their website to find a bunch of educational resources in their trading academy β€” ultimately aiming to help you make more strategic decisions based on things like market analysis and forecasts.

As it’s a very volatile market, as we said earlier, this can be a good help when you need to adapt your trading strategy to match whatever the new conditions are in an ever-changing market.

Leverage

Traditional investing (also known as spot trading), where you actually own the asset rather than just a contract, doesn’t require any kind of leverage or margin, but that’s not the case with CFDs.

In fact, one of the main reasons that’s made CFD trading, and Plus500 itself, so popular in Australia is just this β€” the ability to trade on margin.

What this means is that you’re now able to open a position with only a fraction of whatever the total value of the underlying asset is, meaning that both the potential profits and losses get amplified.

Now, of course, this does introduce an element of risk that’s not there with traditional investing, but it provides an equally exciting opportunity for you to diversify your portfolios and manage your capital a bit more dynamically β€” you just need to be disciplined.

Inherent Risks of Trading With Plus500: Navigating the Market Dynamics

Still, for all we’ve talked positively about why CFD trading and Plus500 specifically are enticing opportunities, we’d be doing you a disservice if we didn’t also acknowledge some of the inherent risks associated with this kind of trading β€” because there are certainly plenty.

Now, it’s worth mentioning that Plus500 does deserve some praise in this regard, as the trading platform explicitly outlines the potential for financial loss due to market volatility and how most accounts lose money when trading CFDs β€” around 74% of retail investor accounts, to be specific.

Leverage is a seemingly pretty magical tool if you previously only have experience opening fairly small positions and being frustrated with the time it takes to grow your portfolio, but it’s absolutely imperative that you’re using it responsibly and not investing more than you can financially recover from losing.

Remember, it can absolutely amplify your profits, even making the whole trading experience a lot more thrilling and adrenaline-induced, but the risk is equally as amplified, and that comes with potentially catastrophic consequences.

Pros and Cons of Plus500


There are plenty of things worth praising Plus500 and online trading platforms more broadly for, but naturally, there’s usually a disadvantage for every advantage with these sorts of services.

So, in the next section of the article, we’ll be providing some of the main benefits and drawbacks of Plus500 β€” specifically focusing a bit more on the fee/additional charges side of things rather than exploring the particular features as much:

Pros

No Deposit Fee or Withdrawal Fees βœ…οΈ

Generally speaking, you’ll tend to find that whether they specialise in CFD trading (like Plus500 do) or even cryptocurrency, most brokers tend to impose some kind of deposit fee every time you need to put money onto their platform to trade.

Fortunately, though, no such fee exists with Plus500, so this can definitely be of interest to anyone looking to fund their trading accounts without incurring any additional costs, which, let’s be honest, is everyone.

In particular, the lack of fees for depositing money can be especially beneficial for any of the retail investors reading this article, as smaller accounts can definitely take a hit when you’re already working with a lack of resources.

Even still, most trading platforms tend to charge a percentage of the total amount you want to deposit as the fee rather than a flat sum of cash, so larger investors who might be placing more substantial trades will definitely feel this hit, too.

Efficient Overnight Funding Time βœ…οΈ

In addition, it’s worth mentioning that Plus500 is relatively stable in terms of overnight funding (also known as swap rates or rollover fees), which is essentially one of the costs that come with holding a trading position overnight.

If you’re using the CFDs or derivatives market on Plus500 with margin or any kind of leverage, the general expectation is that you’d be required to pay (or even receive, in some cases) overnight funding fees based on whatever differentials in interest rates are between the currencies or assets being traded.

This may seem a bit complicated, but the main takeaway here is that most trading platforms have quite lengthy processing times for these particular fees, and that can definitely have a negative impact on your experience using their platform.

Plus500, on the other hand, tends to process overnight funding requests quite efficiently, so this is obviously a massive benefit to anyone who’s trading forex, crypto, or any other time-sensitive markets.

Cons

Trading Fees ❌️

Unfortunately, while the range of standout features you can expect to see on Plus500 is definitely its major selling point, the trading fees and finance rates they provide seem to be slightly higher than the industry average β€” with a financing rate of 3.6% for any transactions that you make using popular trading pairs like EUR/USD, for instance.

In comparison, platforms such as eToro charge approximately 2.5% for the same currency pairs, so the disparities between these two figures can absolutely add up if you can envision yourself making plenty of trades.

While not as poor in some of the other fees you have to pay when using trading platforms, Plus500 may not be as appealing to any retail traders out there who might be looking for a slightly more cost-effective service β€” especially if you’re using it for the long run.

Having said this, it’s worth giving some credit to the platform since they are fairly committed to transparency with its fee structure. This isn’t always the norm among the range of different trading platforms currently available, so a general lack of any shocking hidden fees is definitely something that contributes to why it’s such a popular service.

Inactivity Fee ❌️

We’ll come onto this in more detail later, but it’s worth mentioning that Plus500 charges what’s known as an inactivity fee, and while this is actually quite common practice in the industry, it’s obviously still something that can catch you off guard and be pretty frustrating.

So, just make sure that you’re aware of what Plus500’s policies are here to avoid any unexpected costs.

Potential Losses in Retail Investor Accounts ❌️

Lastly, you should probably be used to hearing that there’s quite a heavy inherent risk involved with any form of trading, but nowhere else is this more evident if you decide to invest in futures contracts with Plus500 and begin day trading on leverage.

At this point, it’s an incredibly old story that retail traders get blown out of the water by institutional investors and hedge funds whenever they begin to step into such a volatile and unforgiving trading atmosphere, so you should always be aware of this looming possibility β€” meaning your trading account can absolutely incur losses based on whatever the market conditions are or even just your individual trading strategy versus the expertise of the aforementioned trading professionals.

Ultimately, simply having a baseline understanding of things like the daily overnight funding percentage and any other potential risks that come with trading is imperative if you want to make it anywhere as a profitable investor.

What Are Plus500 Fees Like? πŸ’°οΈ


Moving forward, let’s break down some of the individual fees you can expect to find when trading with Plus500 in a little bit more detail:

Inactivity Fee at Plus500

Other than the specific fees you’ll get charged for CFD trading, which is fairly hard to calculate, there are a few non-trading fees worth knowing about, too, that aren’t related to the actual buying and selling of anything you’re trading.

In particular, let’s look at inactivity fees since you’ll be charged $15 AUD per month if you go three consecutive months without any kind of account activity. Just for clarity, inactivity, in this context, is just the absence of account logins, so definitely make sure you find a way of avoiding this β€” especially if you’re more of a buy-and-hold trader.

So, it goes without saying that anyone who opts for a more long-term, low-frequency trading approach is possibly going to find Plus500 a little bit less appealing.

To put this in context, eToro’s inactivity fee is only $10 per month, and that’s after your account has been inactive for a year. In comparison, Plus500 is definitely less generous with both the size of the fee and the time it takes for it to apply, so if you feel like you might anticipate fairly long periods without ever making a trade, you may prefer eToro, for example.

Currency Conversion Fee

Anyone who likes to invest across multiple markets and currency pairs should also be aware of the currency conversion fees that come into effect when converting funds from one currency to another (0.7% markup).

Obviously, this is something that’s going to have an impact on the overall cost of trading, so you’d need to see if it’s still sustainable for you to handle the rest of the fees.

Final Thoughts πŸ’‘οΈ


To wrap the article up, the main takeaway here should be that although Plus500 is generally one of the most popular trading platforms to get involved with in Australia β€” whether you’re trading CFDs or cryptocurrency β€” the bulk of this popularity is due to the range of features you can utilise, because the fees aren’t exactly anything to write home about.

Plus500 logo

CFD Service. Your capital is at risk.

Of course, the lack of withdrawal fees or even deposit fees is definitely something that makes Plus500 stand out among other brokers like eToro, but when you remember all of the additional fees that come with the platform β€” inactivity fees or non-trading fees, for example β€” this can dampen the excitement a little bit.

Ultimately, the fees aren’t bad with Plus500; they’re just not the main selling point of the platform. So, if you’re a retail investor who’s doing all they can to mitigate costs where possible, you’d probably be better off with a slightly more affordable platform β€” just expect the standard of features to possibly suffer, too.

FAQs πŸ“’οΈ


How Can Risk Management Tools Enhance the Trading Experience for Investors?

For instance, look at particular risk management tools like Stop Loss and Take Profit orders β€” these essentially allow you to set a predefined level for closing the position you have open rather than needing to close it manually. Naturally, this gives you a well-needed element of control in any other fairly unpredictable trading environment, so it’s worth exploring these tools.

How Do Traders Benefit From Using Demo Accounts Before They Invest?

Put simply, a demo account gives you a pretty invaluable chance to practise some of your trading strategies without actually undergoing any financial risk β€” it’s a simulated trading environment, so you’re basically just getting a chance to familiarise yourself with the platform and build up some confidence before committing real money.

What Impact Does Real-Time Market Information Have on the Decision-Making Process for Traders?

Generally speaking, being able to keep live tabs on how the market is performing is a massive part of good decision-making, so if the trading platform you’re using gives you access to this kind of information, you’ll be able to adapt a lot more quickly to market changes β€” ultimately helping you stay ahead of the curve.


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